Audit committee suggests Telstra Health contract termination over cancer screening register delay

The Department of Health should consider terminating its AU$220 million contract with Telstra Health over delivering the long-delayed national cancer screening registers, the joint audit committee has recommended.

A joint audit committee has suggested that delays in delivering cervical and bowel cancer screening registers by Telstra Health could result in a termination of the AU$220 million contract, or with penalties to be paid by the provider.

In Report 472: Commonwealth Procurement -- Second Report Inquiry based on Auditor-General's reports 9 and 12 (2017-18) and 61 (2016-17) [PDF], published on Thursday, the Joint Committee of Public Accounts and Audit made several recommendations to the Department of Health.

These included reporting to the committee on whether due to the "serious underperformance by Telstra Health" the Commonwealth should terminate the contract and "pursue other options for either or both registers", which were meant to be delivered by May 1, 2017, and March 20, 2017.

"If Health is of the view that this is not the best course of action, then the committee requests advice as to penalties the Commonwealth could consider seeking from Telstra Health, given the significant extra costs incurred as a result of this delay, and what advice Health has sought regarding these issues," it added.

The committee also recommended that the Department of Health provide six-monthly progress reports until both cancer screening registers are operational or the contract has been terminated.

"The reports should be comprehensive and outline progress, cost impacts, risks, and benefits, including changes in participation rates and expected implementation dates," the committee explained.

The Department of Health was also told to provide the committee with clearer information on the objectives of the National Cervical Cancer Screening Register and the National Bowel Cancer Screening Register, as opposed to the objectives of the overall national cancer screening program as a whole.

"Noting that achieving value for money is expected to be a central consideration of Commonwealth procurement activities, the committee recommends that the Department of Health report back with details of how it is proactively managing the National Cancer Screening Register (NCSR) contract and monitoring progress to ensure that value for money is achieved in the establishment of the NCSR, including: Details of any savings achieved from NCSR operations and/or any additional costs to the Budget; [and] whether the process of providing NCSR Medicare data to Telstra has concluded, and whether that data is complete and reliable," another recommendation said.

As a broader suggestion, the committee said Health should "significantly improve its consideration of risk during future procurement planning".

The department had told the committee in March that its NCSR for bowel cancer, being delivered by Telstra, will not be operational until late calendar 2019.

Speaking before a public hearing of the Joint Committee of Public Accounts and Audit, Department of Health National Cancer Screening Taskforce First Assistant Secretary Bettina Konti had said the department and Telstra were continuing to focus on delivering the cervical cancer screening register.

"All our focus is on ensuring that we can complete the National Cancer Screening Register to support cervical screening, and for that reason we and Telstra Health have moved our resources into that in order to ensure that occurs. Once that is implemented and stable, the planning will recommence for bowel cancer transition," Konti said at the time.

"It's a shift in date."

However, while late 2019 is the goal, Konti admitted that "there isn't a target date" for the bowel cancer screening register.

"We know that for every stage in a person's bowel cancer screening pathway, the amount of information that is reported back to the [existing paper-based] register becomes less and less because it is a reporting burden for the clinicians," Konti conceded.

"The inefficiency is what is intended to be corrected by the transition to the National Cancer Screening Register."

The audit committee hearing had kicked off due to findings in June 2017 by the Australian National Audit Office (ANAO) that the Department of Health had no plan for how privacy and security would be handled by Telstra for the National Cancer Screening Register, with "inadequate" planning leading to additional costs.

The telco's proposed data protection plan had been rejected in December 2016, as it did not comply with the contract's requirements, the ANAO said it its report, while key objectives had not been met in the agreed timeline due to limited consideration of privacy, security, and conflicts of interest.

The contract had required Telstra to submit a data-protection plan within 40 days of signing the contract, and thereafter a privacy policy and security risk management plan, with Telstra and its sub-contractors also required to sign a confidentiality and privacy deed. Employees with direct access to the register would also need to have appropriate security clearance.

Telstra had attributed its previous missed deadline of May 1, 2017, to the "complexity of assimilating and migrating data from eight state and territory cancer registers into one register", and said it was aiming to have the register operational by December 2017.

At the time, the ANAO said the first missed deadline led to additional costs of around AU$16.5 million, due to the Department of Health having to pay pathology providers to continue providing pap smear tests until the screening can begin through the new register.

During the committee hearing in March, Konti had said the Department of Health had weighed up the "risks" associated with each tenderer, but ultimately decided to go with Telstra to deliver the system.

The news of further delays followed Australia's Shadow Minister for Health and Medicare Catherine King a year ago accusing Telstra of delaying the cervical cancer register out to March 2018.

Labor has opposed the Telstra contract since the beginning, in September 2016 saying it would be pushing changes to prevent Telstra from handling citizens' health data. Labor was looking to move amendments to ensure that the National Cancer Screening Register could only be run by the government or a non-profit organisation, and not by a private company.

Under the deal, Telstra Health was tasked with creating a database of cancer records for those who have been screened for bowel and cervical cancer, with patients and doctors able to access the register online. The register will integrate eight existing cervical cancer registers and the current bowel cancer register, with more than 11 million separate records being amalgamated onto a single platform.

The register will be overseen by health professionals, and will link records from federal, state, and territory government agencies, My Health Record, and Medicare, as well as private health service providers, pathologists, and general practices. It will provide mail-based reminders for patients whose cancer screening is due, and a contact centre for those needing assistance.

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